Via Yahoo Finance

One thing that I do at the end of every year when reviewing my portfolio is construct a list of the stocks that I want to buy in the next year. With that in mind, here’s a look at the two FTSE 100 dividend stocks that are top of my wishlist heading into 2020.

InterContinental Hotels Group

One FTSE 100 dividend stock I’d definitely like to buy for my ISA next year is InterContinental Hotels Group (LSE: IHG). It’s a leading hotels company that owns a top portfolio of brands including InterContinental, Holiday Inn, and Crowne Plaza, and has nearly 5,800 hotels across 100 countries in its group.

The reason I like IHG is that the company looks well placed to benefit from a number of structural growth drivers in the years ahead. For example, there’s the retiring Baby Boomers, who generally love to travel. Then there’s the rise in wealth across emerging markets, which should also be good for the travel industry. In addition, air travel is becoming cheaper, while technology has made the process of booking hotels much simpler. Add in the fact that IHG’s brands provide a competitive advantage and you have a pretty compelling long-term growth story, in my view. 

Having said that, I won’t be buying IHG shares just yet. With the stock trading on a forward-looking P/E ratio of 21.2 and sporting a dividend yield of just 1.9%, I think it’s worth waiting for a better buying opportunity. I’ll be looking to buy IHG shares when we next see some market volatility. 

Smith & Nephew

The next FTSE 100 dividend stock on my wishlist is healthcare company Smith & Nephew (LSE: SN). It’s a leading provider of hip and knee implants and advanced wound management solutions, and also has exposure to surgical robotics – an area of the healthcare market that has significant growth potential. 

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The main reason I like the look of Smith & Nephew is that I see the company as an excellent way to play the world’s ageing population. According to data from the United Nations, by 2050, one in six people across the world will be over age 65, up from one in 11 in 2019. Given that our bodies tend to break down as we age, Smith & Nephew should benefit from this dominant demographic trend.

In addition, I like the fact that it has significant exposure to the world’s emerging markets (about 17% of revenue last year). Rising wealth in these economies should also boost demand for the group’s products over time.

Like IHG, Smith & Nephew shares look a tad expensive right now. Currently, the forward-looking P/E ratio is about 22.6 and the dividend yield is an underwhelming 1.6%. Given these metrics, I’ll be holding off on buying for the time being. Hopefully, when market volatility returns, a more attractive buying opportunity will present itself.

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Edward Sheldon has no position in any shares mentioned. The Motley Fool UK has recommended InterContinental Hotels Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2019